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China's Housing Prices Fall 2.7% MoM in November, Marking Sharpest Decline of 2025

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  Published in House and Home on Monday, December 15th 2025 at 3:46 GMT by KELO

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China’s Home Prices Slide Further in November: A Comprehensive Review of the Latest Market Trends

In a recent update published by Kelo on December 14, 2025, China’s residential real‑estate market continued its downward trajectory, with November’s price index marking a fresh decline. The article synthesizes data from the National Bureau of Statistics (NBS), official statements from the Ministry of Housing and Urban‑Rural Development, and a range of industry reports to paint a picture of a market that is still grappling with a confluence of supply‑side excess, dampened consumer confidence, and tightening monetary policy.

1. November’s Price Movements: Key Numbers

According to the NBS’s monthly report, the China Housing Price Index (CHPI) fell 2.7 % month‑over‑month in November, a figure that matches the steepest decline recorded in the past year. The year‑on‑year drop widened to 8.3 %, a widening of the 7.9 % decline seen in October. While the fall was less pronounced than the 4.2 % drop registered in September, the persistence of the trend indicates that the market is not yet rebounding.

The article highlights that the decline is not uniform across the country. Coastal megacities such as Shanghai, Shenzhen, and Guangzhou saw steeper price erosion, averaging a 3.5 % month‑on‑month drop, whereas inland provinces like Sichuan and Hubei recorded a softer decline of 1.8 %. The variation is attributed to differing local demand dynamics and policy responses, which will be discussed in later sections.

2. Drivers Behind the Continued Slide

2.1. Oversupply and Inventory Pressure

The most cited cause for the price fall remains an ongoing oversupply in many urban centers. Developers have been reluctant to reduce prices due to expectations of a future rebound, but the sheer volume of unsold inventory—especially in the second‑hand market—has begun to squeeze the price base. The article points to the NBS’s Inventory‑to‑Sales Ratio for 2025, which has climbed from 0.9 in early 2024 to 1.2 in November, underscoring a market that is producing more homes than it can absorb.

2.2. Weakened Demand and Changing Consumer Sentiment

The article reports on a survey by the China Real Estate Research Center, which found that 45 % of prospective homebuyers cited a lack of confidence in long‑term market stability as a key reason for postponing purchases. This sentiment is partially rooted in the high debt levels of local governments, which rely heavily on land sales revenue. As the central government signals a crackdown on excessive fiscal borrowing, local authorities are under pressure to maintain land sales, creating a paradox where developers face lower sales volumes yet continue to compete fiercely on price.

2.3. Monetary Policy Tightening

In October, the People's Bank of China (PBOC) lowered the one‑year loan prime rate (LPR) by 10 bps, a move that was expected to stimulate borrowing. However, the article notes that the credit‑to‑GDP ratio for the real‑estate sector has stalled at 25 % since the policy shift, indicating that lenders are becoming more cautious. Moreover, the PBOC has signalled that it will maintain a tighter stance on mortgage rates until the economy shows clear signs of sustained growth, thereby limiting the potential upside for buyers.

3. Regional Policy Variations

While the central narrative of a cooling market prevails, the article underscores a mosaic of regional policy initiatives:

• Shanghai: The municipal government introduced a temporary “home‑buyer subsidy” for first‑time buyers in low‑income districts, aiming to stimulate demand in a market that has been the most affected.
• Guangzhou: The city’s housing authority rolled out a “second‑hand home guarantee” scheme, providing a limited number of mortgages at lower down‑payment requirements for older homes, which were the hardest hit by price erosion.
• Hubei Province: Local authorities implemented a “price floor” policy for new developments in priority cities, preventing developers from dropping prices below a certain threshold, thereby attempting to cushion the impact on the local economy.

These varied approaches highlight the decentralized nature of China’s real‑estate policy landscape, where local governments tailor measures to the specific conditions of their markets.

4. Developer Outlook and Corporate Health

The article includes a segment on how the price slide is affecting major developers. While China Vanke and Sunac have been forced to delay new launches in some markets, the developer Yuanpei Group has reported a 15 % decline in Q3 sales revenue, citing the combined effect of lower prices and weaker demand. Conversely, smaller developers that operate in secondary markets have managed to maintain more stable sales volumes, thanks to the relative affordability of their listings.

The NBS’s “Enterprise Credit Report” shows that 35 % of property developers have seen their credit ratings downgraded in the last six months, a trend that could constrain future borrowing capacity and further tighten the market.

5. Government’s Forward‑Looking Measures

The article quotes a spokesperson from the Ministry of Housing and Urban‑Rural Development who indicated that the central government is actively exploring a “three‑step strategy” to stabilize the housing market:

1. Reducing Inventory: Encouraging developers to off‑load surplus stock through public‑private partnerships and “inventory clearance” programmes.
2. Stimulating Demand: Adjusting mortgage policy to lower down‑payment rates for first‑time buyers and expanding the eligibility criteria for home‑purchase loans.
3. Supporting Local Governments: Revising the land‑sale revenue formula to allow local authorities more flexibility, thereby reducing the pressure to over‑sell land at lower prices.

Additionally, the Ministry is reportedly preparing a new round of targeted fiscal subsidies for regions where home‑price declines exceed the national average.

6. Broader Economic Implications

While the article focuses on the housing market, it situates the price slide within the broader economic context. Analysts suggest that continued price erosion could exert a drag on GDP growth through a negative wealth effect on homeowners, leading to lower consumer spending. Moreover, the property sector’s contraction could ripple through related industries such as construction, steel, and cement, potentially widening unemployment in those sectors.

The article also raises concerns about the potential for a “housing‑bubble‑to‑crash” scenario if price declines become more pronounced, especially in high‑price cities where mortgage debt already constitutes a large share of household finances. The risk is mitigated by the fact that the PBOC has maintained a relatively accommodative stance, but the trade‑off remains a delicate balancing act between stimulating growth and preventing debt over‑accumulation.

7. Bottom Line

China’s housing market is experiencing a persistent slide, with November’s price index marking a significant decline both month‑over‑month and year‑over‑year. The main drivers—oversupply, weak demand, and tightening monetary policy—are compounded by regional disparities and divergent policy responses. While the central government is exploring a multi‑pronged strategy to address these challenges, the market’s recovery will hinge on the interplay between fiscal incentives, local government flexibility, and macroeconomic stability.

The Kelo article provides a comprehensive, data‑driven snapshot of the current state of China’s real‑estate landscape, offering a valuable resource for investors, policymakers, and industry stakeholders who must navigate the uncertainties that lie ahead.